Private equity and the lodging industry are a natural match with hotel transaction volumes reaching $16.3 billion in 2012 — their highest since their peak in 2007. Then, REITs owned 67% of rooms leaving private equity with 12%. Now, private equity firms own 59% and REITs have own 33%.
“Private equity firms tend to acquire assets that have value-add opportunities and show promise for upside potential. They can come in and identify underutilized space, like a rooftop or a shuttered meeting room, that isn’t maximized to its full potential and turn it into a money-making [restaurant]” Louro Ferroni, Director of Hotels Research at Jones Lang LaSalle in Chicago, told Forbes (The New Hotel Tycoons: Why Private equity Loves the Lodging Industry, September 2013).
This is just one aspect of how Urbana Varro, a private equity firm specializing in the hotel industry, works to put its investments to good use. Urbana Varro is skilled at both investing and managing hotels and seeks out properties poised to take advantage of the growth in the industry. Just look at the Hilton Greenville and TownPlace Suites.